How Unequal Is Income Distribution in the U.S., Really?

New York Times columnist Thomas B. Edsall evaluates the recent conversation on the purportedly exponential growth of income disparity between the "superrich", the regular-old rich and the rest of us. The most commonly cited current evidence is the Saez-Piketty study, which reports that

"From 1970 to 2010, . . . the share of total market income going to the top one percent more than doubled, from 9.03 to 19.77 percent. The share going to the top 0.1 percent more than tripled, from 2.78 percent to 9.52 percent; and for the top 0.01 percent, it nearly quintupled from 1.00 percent of the total to 4.63 percent."

Conservative journalist/blogger James Pethokoukis, however, has been raising the profile of other, more nuanced research that demonstrates a disparity in real income less extreme than the "market income" figures touted by liberals as proof of a shamefully inequitable economic system. Such "real income" includes non-taxable income, such as employer-provided health insurance, Medicare, Medicaid, Social Security and other government sanctioned benefits, which help "level the economic playing field", so to speak.

Aha! Claims of rampant inequity have been grossly exaggerated. The liberal agenda has been exposed right before our eyes! Chalk one up for the Right!

But wait. What (better: who) has been the moderating factor in this equation? Oh yeah, the government. Mr. Edsall insightfully points out the contradiction:

"The driving force behind lessened inequality that Burkhauser posits stems from government intervention, combined with pressure on the private sector to provide health care benefits — the very things the right objects to."

As the saying goes, we can't have our cake and eat it too. The fact is that our government has played a vital role in helping the lower socioeconomic "classes" (when will we find a more civilized synonym for that term?) survive amidst an economic system strongly favoring the super-wealthy. We the 99% have the power via our government to effect policies that make the American Dream an achievable reality for the vast majority of our citizens. Why squander it?